Drop Stop Case Study

Mark Neuberger and Jeffrey Simon have created a company called Drop Stop. This company manufactures and sells a product intended for car use. The product “Drop Stop” is a cushion that is placed between the center console and seat of consumers’ cars in order to prevent items from falling down that gap. Currently, Drop Stop is going through an expansion period and they need capital to promote growth. Consequently, the entrepreneurs are seeking 300 thousand dollars in exchange for 15 percent equity in their company; before investing, there are several factors that one must take into consideration. The company has a positive brand image. The purpose of selling their product is to save lives. Studies show that there are over five thousand distraction-induced car accidents; distractions like reaching in the gap between the center console and seat of a car to grab a fallen object. As a result, Drop stop hopes to reduce these distraction-induced car accidents by providing consumers with a product that will stop the drop. However, positive branding is not enough to make this company a good investment. While the product is not one that is absolutely essential for consumers to obtain, the number of sales show

For example, they sell through their website and through catalogues, but most impressively, their product has been featured on QVC over 42 times. However, this product has not yet reached retailers. Also, because Drop Stop is well established, it’s difficult to add value to the company; needless to say, it would take great commitment. Essentially, an investor would be acting as nothing more than a paycheck for them. Moreover, it’s hard to tell where the capital requested by the entrepreneurs will go since their company is more of a product and less of a company. This being the case, the more growth the company experiences, the more capital will be